How We Got Here: With help from strong data on the housing market, the Nasdaq Composite Index finished above 4000 for the first time in 13 years.

With its push to top that level, the Nasdaq’s year-to-date gain of more than 33% is far outpacing the Dow Jones Industrial Average’s rise of 23% and the 26% rally in the S&P 500. Fueling the Nasdaq’s rally is a hunt by investors to for more rapidly growing companies in an economic recovery that has yet to show a sustained acceleration.

But unlike the Dow and the S&P 500, which are far into record territory, the Nasdaq remains roughly 20% below its dot-com era peak. The index hit its all-time high at 5048.62 on March 10, 2000.

Coming Up: Wednesday could bring another quiet session in Asia as a holiday-shortened week in the U.S. keeps a lid on trading. Investors will want to keep a close eye on macro events, however, including a growing political crisis in Thailand as protesters in the capital of Bangkok swarm government offices to demand the resignation of the country’s prime minister.

What You Missed Overnight

Nasdaq Closes Above 4000: With help from strong data on the housing market, the Nasdaq Composite Index closed above 4000 for the first time in 13 years.

U.S. Jets Challenge China’s Air Defense Zone: A pair of American B-52 bombers flew over a disputed island chain in the East China Sea without informing Beijing, U.S. officials said, in a direct challenge to China and its establishment of an expanded air-defense zone.

Men’s Wearhouse — From Target to Suitor: Men’s Wearhouse launched a surprise offer to buy Jos. A. Bank, turning the tables on its erstwhile suitor in its own effort to combine the rival men’s apparel retailers.

China Tees Up Sale of Cotton: Beijing is planning to sell part of its roughly 10 million-ton stockpile of cotton this week, an event long anticipated by traders of the fiber.

Foreign Developers Step Up Plans in China: Property developers eager to capitalize on rising consumption in China are increasingly raising funds to invest in warehouses and shopping malls, muscling in on an area traditionally dominated by private-equity companies.

From MoneyBeat

Nasdaq 4000 — The Long Trip Back:It’s been a long, tough slog for the Nasdaq Composite Index to close back above the 4000 mark for the first time in 13 years, a sharp contrast with the rocket flight that was its initial trip through the milestone.

Take-Two Interactive — Big Win for Brett Icahn: Carl Icahn’s son Brett scored another win for Icahn Associates Tuesday. Take-Two, the creator of the video games Grand Theft Auto, said it would buy back Icahn Associates 12.4% stake in the company for $16.93 a share. With this buyback, Icahn Associates can boast an estimated $85 million profit on its stake.

Momentum Stocks Come Back to Earth: The high-flying momentum stocks that were at the center of frenzied trading in recent months haven’t been flying so high recently, but chart watchers said that is a good thing for the broader market.